Abstract
Because issues associated with climate change are historically unprecedented
and thus policymakers do not have a prior distribution over possible outcomes,
the usual theoretical approach based on governments maximizing expected utility
may not be suitable for analysing climate policy choice. Under an alternative plausible
assumption that policymakers act strategically but choose the policy that incurs the
highest possible gain in theworst-case scenario, this paper shows howcollectivism can
be inferior to unilateralism in both carbon mitigation and economic loss minimization.
Our proposed approach provides a possible explanation for several paradoxes
in the existing literature in relation to uncertainty and climate policy negotiation. It
also provides an analytical framework that can be applied to numerical simulations of
international climate policy games.
Original language | English |
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Pages (from-to) | 101-115 |
Journal | Italian Economic Journal |
Volume | 1 |
Issue number | 1 |
DOIs | |
Publication status | Published - 2015 |